U.S. new home sales unexpectedly fall in Feb

By IBT Staff Reporter03/24/10 AT 12:22 PM

Sales of newly built U.S. single-family homes fell for a fourth straight month to a record low in February, a government report showed on Wednesday, heightening fears of renewed weakness in the housing market.

The Commerce Department said sales fell 2.2 percent to a 308,000 unit annual rate from an upwardly revised 315,000 units in January.

Analysts polled by Reuters had expected new home sales to edge up to a 320,000 unit annual pace from January's previously reported 309,000 units.

The data came on the heels of report on Tuesday showing existing home sales fell for a third straight month in February and a jump in the supply of houses on the market.

Sales have barely responded to the extension and expansion of a popular tax credit, which boosted purchases in the second half of 2009, raising concerns over the fragile housing market's recovery just as a key pillar of support is being dismantled.

The Federal Reserve will end purchases of mortgage-related securities next week, which had lowered the cost of home loans to record lows.

But there were some glimmers of hope for the sector at the heart of the worst U.S. downturn since the 1930s. The median sale price for a new home rose 5.2 percent in the 12 months through February, the biggest gain since September 2007. Compared to January, prices were up 6.1 percent, the largest month-on-month rise since April.

The number of new homes on the market last month increased 1.3 percent to 236,000 units. February's weak sales pace left the supply of homes available for sale at 9.2 months' worth, the highest since May, from 8.9 months in January.